Changpeng Zhao, Founder and CEO of crypto exchange giant Binance, has described Africa as an untapped market place with a plethora of opportunities for blockchain technology and widespread cryptocurrency adoption.
Africa’s Untapped Crypto Market
During an interactive “ask me anything” session on Zoom, CEO of Binance Changpeng Zhao popularly known as CZ discussed the possibilities of driving crypto adoption in Africa’s untapped cryptocurrency market.
Citing the early days of Binance, CZ revealed that the world’s top cryptocurrency exchange by trade volume has always had active users in Africa since the exchange launched in 2017. Seeing a potential market for crypto trading, Binance expanded its presence to the region with the launch of Binance Uganda in 2018.
Since then, the crypto exchange heavyweight has funded a plethora of incubation services that have provided capital for crypto-related startups across Africa. Binance has also enabled trading support and fiat deposits in rands for crypto investors in South Africa. CZ said:
“We view the entire African market as a really key market, and this year we were very lucky to be able to find a good banking partner in South Africa, and we are able to now accept banking deposits directly through bank accounts. We will soon be able to launch credit card buying as well. South Africa, and Africa as a whole, is a really important market for us.”
Despite Africa’s potential to build a foundation for the widespread crypto adoption, there are many challenges hindering progress. CZ highlighted the number of unbanked Africans and existing barriers to Know-Your-Customer (KYC) processes as major problems facing crypto adoption in the region. Attributing these challenges to the banking system in Africa, CZ remarked:
“Working with banks there is a little bit more difficult. The banking API interfaces are slightly older or nonexistent, and the number of people having bank accounts is quite low. So, even if you have a bank account support, the overall population you can tap into [is] still in the low double digits.”
Driving Blockchain Adoption in Africa
Referencing South Africa again, CZ pointed out that a few local crypto exchanges are already operating successfully but at a relatively small capacity. The Binance CEO also expressed doubts over the sustainability of these exchanges as making profits could prove difficult.
As Africa’s banking infrastructure is still catching up to modern standards, buying crypto in the region remains fairly complicated. However, with the introduction of trading pairs in local fiat currencies in countries such as Nigeria, crypto trading volumes are slowly growing. According to data from Binance, daily trading volumes in Nigeria recently surpassed $1 million on the crypto exchange.
Furthermore, CZ cited the recent bitcoin (BTC) halving event as another factor that will aid in encouraging crypto adoption in Africa and across the world generally. The Binance CEO explained that:
“There is a lot of fiat money being printed, while we’ve just gone through the Bitcoin halving…and the fiat money is being printed in record quantities now. So, I think the cost of everything will increase very soon. We will see hyperinflation. All of those things are actually really good for cryptocurrencies and for the overall blockchain business.”
Several developments indicate positives for widespread crypto adoption and blockchain technology utilization across Africa. As previously reported by Blockonomi, sub-Saharan African countries topped the list of the most conducive places to own cryptocurrency, according to a Global Digital Report backed by digital media firms Hootsuite and Wearesocial.
Back in April 2019, cryptocurrency options in South Africa were reportedly on the rise. A few months later in December, the South African central bank announced plans to introduce clear cut crypto regulatory policies.